Safaricom Gains 1st Day in Three on Telkom Kenya Cost-Cut Plan
Safaricom Ltd. (SAFCOM), East Africa’s biggest mobile-phone operator, gained for the first day in three after announcing plans to form a joint venture with Telkom Kenya Ltd. to manage their towers in a bid to cut costs.
The company’s stock gained as much as 2.6 percent to 4 shillings before trading 1.3 percent higher at 3.95 shillings as of 11:47 a.m. in the capital, Nairobi.
Safaricom, which is 40 percent owned by Vodafone Plc, and Telkom Kenya Ltd., a unit of France Telecom SA (FTE), are currently in “advanced negotiations” and expect to reach an agreement within the next three months, the companies said yesterday.
“We expect that in addition to the initial equity and debt financing, each partner will contribute some of its existing infrastructure into a common pool,” Telkom Kenya Chief Executive Officer Mickael Ghossein said. “We also expect to consolidate future needs through central planning and deployment so as to take advantage of the economies of scale presented by this deal.”
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